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Charlottesville manager proposes two-cent real-estate tax increase to fund schools, transit and housing
Summary
City Manager presented a balanced FY27 proposal that would raise the real-estate tax by two cents to generate about $2.4 million, boosting local aid for schools, expanding transit service incrementally and funding housing projects including a $15 million commitment for West Haven phase one.
Charlottesville City Manager Mr. Sanders on March 2 presented a proposed FY27 budget that would raise the city's real-estate tax rate by two cents and add roughly $2.4 million in local revenue to help cover school funding, transit expansion, and housing projects.
The proposed general fund totals about $277.2 million, a 4.5% increase over the prior year, and the five-year capital improvement program is $196 million, with $55 million for education, $50 million for transportation and $41 million for affordable housing. Mr. Sanders said the two-cent increase would allow the city to fund deeper transit investments, meet the school system's local-match needs and absorb the near-term costs of multiple recently negotiated collective-bargaining agreements.
Why it matters: School leaders and community groups urged more local support during public comment earlier in the meeting. The schools' FY27 request has been negotiated down from an initial $6.4 million ask to $2.569 million; the manager said that amount is included in his proposal. The manager also described a multi-year plan to hire transit drivers and increase frequency, estimating an initial $2.22 million operating need and stressing that full optimization will require sustained investment.
Details: The budget includes: a $2.569 million local appropriation request for Charlottesville City Schools; a $2.22 million initial transit commitment to add drivers and keep fares free at initial service levels while absorbing collective-bargaining impacts; and continued capital support for affordable-housing projects, including the previously budgeted $15 million over three years for West Haven phase one. The proposed five-year CIP is financed partly by $147 million of projects eligible for bonding when appropriate.
On staffing and compensation, the plan proposes a 2% step increase plus a 2% pay-scale adjustment for unaffiliated employees and reflects negotiated settlements for police, fire and transit staff; the manager said these collective-bargaining outcomes are a major driver of increased personnel costs.
Budget process and next steps: Work sessions on revenue and expenditures are scheduled before final adoption; the manager outlined a public schedule with budget adoption set for April 9. He said council must balance each new request with offsets elsewhere if changes are made, and reminded the public that one-time surplus and ARPA resources remain but are not a substitute for recurring revenues.
What council did: The meeting recorded public comment, received the manager's proposed FY27 budget, and scheduled work sessions for further review. No final vote on the tax rate occurred that night.
Sources: Budget presentation and discussion at the March 2, 2026 Charlottesville City Council meeting, including remarks by City Manager Mr. Sanders and school officials.
